Budget 2026 Expectations Highlights: Bond markets look for fiscal discipline and borrowing clarity in Budget 2026

Krishnan Venkateswaran, Chief Digital and Information Officer at Titan said, “The Union Budget’s relevance to technology will lie in how clearly it supports long-term, platform-led transformation rather than isolated technology adoption. The sector is eyeing predictability especially in areas such as data governance, AI regulation, and digital skilling, as these determine how confidently India Inc. can invest in scalable, integrated, and AI-enabled enterprise platforms. Clarity on data and compliance expectations is critical. Policies that strengthen formalisation, traceability, and transparency directly influence how organizations design their core platforms and how data is captured, governed, reconciled, and made usable across brands and functions. These are not incremental decisions as they will shape the durability of digital foundations over multiple business cycles.

We are also expecting the budget to supports consumption and manufacturing priorities. Measures that sustain demand reinforce investments in customer experience, analytics, and scalable digital front ends will be instrumental. Additionally manufacturing-focused initiatives will help accelerate investments in automation, real-time visibility, and connected operations across factories and supplier ecosystems. From a technology standpoint, sustained emphasis on large-scale skilling and upskilling is equally important. Building internal capability alongside partnerships with established and emerging technology providers will propel responsible AI adoption at scale.

Overall, the Budget’s approach to regulation, skills, and enterprise digitisation plays a defining role in how India Inc. sequences technology investments, chooses platforms, and builds resilience.”

Tadashi Chiba, Managing Director & CEO, Panasonic Life Solutions India said, “The Union Budget 2026–27 comes at a time when India’s economic momentum remains strong, with the country poised to become the world’s fourth-largest economy. Continued emphasis on manufacturing-led growth through initiatives such as PLI and the Electronics Component Manufacturing Scheme (ECMS), alongside investments in infrastructure, logistics efficiency, and support for R&D and design-led manufacturing, will be critical to sustaining this growth and strengthening India’s manufacturing ecosystem.

The consumer durables sector looks forward to policy measures that further strengthen domestic manufacturing and stimulate consumer demand. Rationalisation of customs and GST duties on key components, including compressors, and addressing inverted duty structures will improve the cost competitiveness of locally manufactured appliances and electronics. Enhanced support for component manufacturing through existing incentive frameworks and targeted tariff reforms can deepen localisation, improve ease of doing business, and better integrate India into global value chains, accelerating the country’s journey towards becoming a globally competitive manufacturing hub while ensuring sustainable growth for the consumer durables sector.”

Dr. B.V.R. Mohan Reddy, Founder Chairman, Cyient said, “As India prepares for Budget 2026, there is strong confidence that the government will further accelerate productivity-led growth by building on its consistent efforts to enhance ease of doing business and policy predictability. Continued steps to simplify regulations, reduce compliance friction and minimise litigation will reinforce India’s attractiveness as a global investment destination. In line with NASSCOM’s recommendations, sustained and enhanced public investment in education, skilling, applied research and emerging technologies such as AI, digital engineering and deep tech will strengthen India’s innovation ecosystem. A robust education–research–entrepreneurship continuum will play a key role in advancing global competitiveness and long-term economic resilience.”

Deepan Kapadia Executive Director & CIO – Portfolio Management Services at ( Spark Capital Private Wealth Management) said,

"India’s Budget 2026 is expected to reinforce the investment-led growth framework rather than pivot toward near-term consumption stimulus. With nominal GDP growth projected at around 10% in FY27 and fiscal consolidation targeted at 4.0–4.2% of GDP, policymakers are likely to balance growth ambitions with fiscal discipline, creating a constructive backdrop for equities.

Capital expenditure will remain the cornerstone of fiscal policy, with central government capex estimated at ₹12–12.5 lakh crore, or roughly 3.2% of GDP. The budget is also expected to deepen India’s strategic manufacturing agenda, with sustained support for defence, electronics, telecom, medical devices, and critical metals, aligned with the objective of reducing import dependence through PLI schemes and targeted industrial policies.

Healthcare is likely to receive focused allocations, including potential expansion of PM-JAY, district-level oncology infrastructure, and medical education capacity, signalling a shift from access-led spending to improving quality and depth of care. Asset monetisation, PPP frameworks, and refined incentive structures should help crowd in private capital without straining public finances.

Overall, Budget 2026 appears positioned to strengthen India’s structural growth narrative, favouring quality capex and manufacturing-led investments over broad consumption themes''.

“For India to convert its strong GCC momentum into sustainable, long-term global investments, the Union Budget must address predictability, competitiveness, and talent enablement. Key policy priorities should include a clear, nationwide tax incentive framework for GCCs, with extended and standardised benefits for IP creation, R&D, and high-end services delivered out of India similar to regimes in Singapore and Ireland to help reverse the trend of incremental offshoring to low-tax jurisdictions.

Additionally, greater GST clarity on cross-border services through a definitive, uniform framework for inter-company global service transactions would eliminate ambiguity that currently adds to compliance costs and slows scaling. Budget allocations for targeted workforce upskilling and reskilling programmes aligned to GCC demand, particularly in AI, software engineering, data sciences, and cloud, will help build a strong talent pipeline for the 2+ million professionals already employed in India’s GCC landscape.

Further, capital expenditure support for scaling GCC centres, including matching support for technology infrastructure and real estate, can accelerate growth in Tier-2 and Tier-3 locations. Collectively, these measures would strengthen India’s value proposition and send a clear signal to global CEOs that the country is committed to being the preferred GCC destination for next-generation capability building.” - Lalit Ahuja, Founder & CEO, ANSR

“We recommend budgetary measures for more credit supply to the rural and lower middle-income segments in India. To achieve this, the Union Budget 2026 can include measures for liberalising branch-opening norms for Gold Loan NBFCs to accelerate outreach and deepen market penetration, especially for secured Gold Loans which carry relatively lower risk. Rationalising capital risk weights for Gold Loans by NBFCs to reduce the cost of lending and enable greater credit flow to rural and semi-urban markets.”

He further recommended, “Harmonising SARFAESI Act applicability for NBFCs in line with banks and Housing Finance Companies (HFCs) to help drive rural housing credit and strengthen recovery mechanisms for smaller-ticket mortgage loans. Also, designing targeted schemes to ensure customers who experienced temporary or one-time credit default are not permanently excluded from formal banking channels and are brought back into the lending ecosystem. And lastly, promoting formalisation of gold lending by encouraging policy reforms that shift activity from informal channels to regulated institutions and strengthen consumer protection.” - Shaji Varghese, CEO, Muthoot FinCorp

Dr Mukesh Batra said he expects the forthcoming Budget to strengthen insurance coverage and wellness provisions to include long-term preventive care, while also accelerating investments in digital health infrastructure and community-based clinics. Such measures, he noted, can help bridge access gaps in Tier-2, Tier-3 and semi-urban regions. Keeping affordability at the core through targeted tax incentives, employer-led wellness programmes and strong public-private partnerships will be crucial to reducing out-of-pocket expenses and ensuring sustainable, inclusive growth in India's healthcare system, Dr Mukesh Batra said.

Dr Mukesh Batra highlighted the rising burden of lifestyle and chronic diseases as a strong case for greater integration of preventive and alternative systems of medicine, including AYUSH. He said this integration should be supported by robust research, evidence generation and transparent regulatory frameworks. Focused investment in research and development, particularly in homeopathy and other AYUSH disciplines, would, he added, enhance credibility, encourage wider acceptance among medical professionals and build public trust.

Looking ahead to Budget 2026-27, Dr Mukesh Batra said there is a significant opportunity to build on current momentum by reorienting healthcare delivery towards prevention, early intervention and personalised care. He emphasised that effective implementation must go hand in hand with budgetary planning, calling for judicious utilisation of allocated funds and a clear assessment of their on-ground impact on beneficiaries.

"The Economic Survey 2025 sets a positive backdrop for Budget 2026-27, underlining strong economic fundamentals and sustained public spending priorities," said Dr Mukesh Batra, Founder-Chairman Emeritus, Dr Batra’s Healthcare. He noted that the Ministry of Health received close to ₹1 lakh crore in 2025-26, marking a 10-11% increase and reinforcing the government's focus on strengthening healthcare capacity through expanded medical colleges, AIIMS and flagship initiatives such as PM-ABHIM. According to Dr Mukesh Batra, these steps align with the National Health Policy's objective of raising public health expenditure to 2.5% of GDP.

In the run-up to the budget for the financial year 2026-27, the healthcare sector has called for a decisive shift from incremental increases to structural transformation, saying India must bridge the gap between its current trajectory and the National Health Policy target of 2.5 percent of the GDP. In FY25, the initial healthcare allocation stood at Rs 87,657 crore, which rose to around Rs 95,958 crore in FY26, up a 9.46 percent. Despite the increase, public expenditure remains below 2 percent of the GDP. With the sector eyeing a $500 billion valuation by 2047, leaders say the Budget 2026 must provide a "booster dose". (Read More)

“For India’s debt markets, stability will matter more than scale in Union Budget 2026. With the MPC meeting shortly after the Budget and policy rates expected to remain unchanged, investor focus will be firmly on the government’s borrowing roadmap, fiscal discipline, and the predictability of issuance calendars. Clear signals on medium-term fiscal consolidation can help anchor bond yields, limit volatility, and lower funding costs across corporates, banks, NBFCs, and infrastructure players. At the same time, continued policy support for blockchain-based financial infrastructure, such as bond tokenisation and distributed-ledger settlement can significantly improve transparency, efficiency, and risk management in debt markets. With monetary policy on pause, the onus shifts to fiscal policy to sustain confidence, deepen bond market liquidity, and ease refinancing access. Ultimately, the success of Budget 2026 will be judged not by headline announcements, but by how effectively it balances growth with fiscal prudence in a stable rate environment.” -- Pratapsingh Nathani, Chairman & Managing Director, Beacon Trusteeship Ltd.

Global uncertainty has emerged as the single biggest concern for economists heading into the FY27 Budget, overtaking domestic inflation and fiscal risks, according to a pre-Budget poll of 20 economists. When asked about their primary concern for the economy, six respondents cited US and global headwinds, making it the most frequently flagged risk. These include trade protectionism, slowing global growth, and heightened geopolitical tensions. (Read More)

India’s weak household savings, rising debt and currency depreciation expose a ₹500 value divide, highlighting two economic realities and underscoring the need for equitable, savings-led reforms in Budget 2026 (Read More)

Markets and Affordable housing players are hoping for measures that could boost demand and loan growth. Analysts say any increase in home loan interest deductions, PMAY subsidies, or tax incentives for developers could provide a near-term trigger for stocks such as Aavas Financiers, Aadhar Housing Finance, and Godrej Properties, while supporting broader market sentiment in the real estate segment. With Tier-II cities emerging as key growth drivers, the affordable housing space is increasingly seen as a  policy-sensitive sector. (Read More)

As the Union Budget 2026–27 approaches, the gems and jewellery industry is looking to the government for a set of pragmatic measures aimed at easing cost pressures, supporting demand, and strengthening India’s position in global markets. Against the backdrop of elevated gold prices, shifting global supply chains and rising trade barriers, industry leaders believe targeted policy support can have a meaningful impact on growth, exports and employment. (Read More)

The government is expected to avoid aggressive fiscal tightening in the upcoming Budget, choosing instead to preserve room to support the economy amid external pressures, particularly higher US tariffs, The Economic Times reports, citing senior executives at global sovereign rating agencies. Officials at S&P, Moody's and Fitch told The Economic Times that while reforms-especially deregulation and measures aimed at improving revenue buoyancy-would be viewed positively by ratings agencies, any sharp departure from the recent path of fiscal consolidation that weakens fiscal metrics could weigh on India's credit profile. (Read More)

Eligibility under Section 87A is clearly defined, with the rebate available only to resident individuals whose total income does not exceed Rs 12 lakh under the new tax regime or Rs 5 lakh under the old regime. The rebate is capped at the lower of the prescribed limit or the total tax payable before cess, ensuring it merely offsets the actual tax liability. For FY 2025-26, the enhanced rebate under the new regime signals a decisive shift in the government's personal taxation strategy. While the old regime remains relevant for taxpayers who benefit significantly from deductions and exemptions, the revamped Section 87A strengthens the case for the new regime, positioning it as the preferred option for a broad base of middle-income earners by combining simplicity with meaningful tax relief.

Importantly, the claim that no tax is payable on income up to Rs 12 lakh does not mean the basic exemption limit has been increased. The relief is delivered entirely through Section 87A, which applies to tax payable before the 4 per cent health and education cess. However, the rebate does not cover income taxed at special rates, including short- and long-term capital gains on equities, mutual funds, or winnings from lotteries. Taxpayers with multiple income sources must therefore assess eligibility carefully.

Earlier, the Section 87A rebate applied to incomes of up to Rs 7 lakh under the new tax regime and Rs 5 lakh under the old regime. By raising the effective rebate threshold to Rs 12 lakh under the new regime, the government widened the beneficiary base while keeping the existing rate structure intact. The strategy relied on the rebate mechanism to enhance post-tax disposable income and reinforce the simplicity of the new regime.

From the financial year 2025-26, resident individuals with total income of up to Rs 12 lakh can effectively bring their income tax liability down to zero, provided the tax payable before cess does not exceed Rs 60,000. This represented a significant expansion of tax relief targeted at middle-income earners, achieved without revising tax slabs or the basic exemption limit.

As the Budget 2026 countdown begins, attention is also turning to the major policy changes announced last year. Union Budget 2025 introduced a notable shift in personal income taxation by expanding tax relief through Section 87A of the Income Tax Act, a move that continues to shape tax planning for salaried and individual taxpayers.

With the Economic Survey 2026 and the Union Budget approaching, expectations are rising around Finance Minister Nirmala Sitharaman's policy direction. She is scheduled to present the Budget on Sunday, February 1, marking her ninth straight Budget speech and the first Union Budget in more than a decade to be delivered on a Sunday.